Category Archives: Cannabis and Bitcoin

At 4:20pm Denver time CCC is announcing the Crypto Cannabis Conference (CCC) 2016 is hosting its second annual event in Denver, Colorado on October 21-22, 2016. The conference is special in that it works to connect the cannabis and cryptocurrency industries. While Marijuana laws have been changing at the state level, with almost half of the United States adopting medical use statutes, the plant remains illegal at the federal level. Conflicting laws have made it difficult for businesses in the cannabis industry to get proper banking services. Many banks do not work with the industry due to the real threat that the federal government could issue punishment.

While some credit unions and small banks serve cannabis businesses under secrecy, there is still a financial divide between legal cannabis businesses and the mainstream economy. Bitcoin can help fill that gap. By accepting bitcoin and using it up and down supply chains, marijuana businesses will have access to a secure financial system that is just as effective as traditional banking — if not more.

Robert Stephan started the CCC to bring together the two budding industries. He has included the fintech industry as well, bringing on speakers who are knowledgeable about the benefits of cryptocurrency. There are many different providers of not only point of sale systems but also debit card, tax software and cold storage systems for a businesses financial ease of use.

Any industry that’s having a hard time dealing with traditional banks is a prime target for Bitcoin adoption. The medical marijuana industry falls directly in this camp.

At the 2015 conference, Arie Y Levy Cohen discussed FinTech’s place in the Cannabis and Bitcoin industry, while Agricultural Genomics Foundation Founder Dr. Daniela Vergara talked about genomic research in cannabis and some of the results from the Cannabis Genomic Research Initiative.

Earlier this year, CCC hosted a Bitcoin Q&A panel at the Cannacon meeting in Seattle, moderated by Caleb Chen.

Many speakers are slated to present at CCC 2016, covering topics aimed at the conference’s two main goals:

Educating newcomers on the basics of cryptocurrency. During the conference’s morning session, attendees will be able to participate in hands-on exercises to get a feel for how Bitcoin works.

The list of speakers as we noted is ever growing. Experts from many parts of both the Cannabis and Bitcoin industry will be speaking and taking questions. Most will also be participating in the after parties and VIP events. Several of the industry speakers are:

Bitcoin and Cannabis

Unfortunately, in legalized states such as Colorado, banks are unwilling to take cash coming in from cannabis businesses. Financial institutions are scared to accept this money as it comes into these companies in large amounts. This is highly evident in the Netflix documentary, “High Profits,” where hundreds of thousands of dollar bills are awkwardly managed by businesses on film.

Unaccountability is the CBE author’s problem with Bitcoin being used within the marijuana industry. He explains, “I do not endorse BitCoin for cannabis because I want every last dollar of this industry accounted for and taxed and regulated, without obfuscation.” This rationality is quite unrealistic considering the protocol is a digital ledger unlike the pen and paper accounting done on the show High Profits. Maybe he’s content with these businesses having to deal with cash in a very dangerous manner. The operation filmed on High Profits showed hundreds of thousands of dollars located in an unguarded home and young store clerks walking this cash in bags to the state department. There’s nothing accountable or responsible within an operation that works with money like this, and the fact it happens is absurd.

Netflix original High Profits shows large amounts of cash kept on site.

The writer in CBE’s article says he wants every dollar accounted for, but doesn’t realize the blockchain is a digital ledger that records everything. This data is cryptographically secure, time stamped and quite fast for merchants of any business. Users could purchase Bitcoin instead of using cash and buy the high-grade marijuana from these locations. Merchants wouldn’t even have to use paper money at all and could operate a 100% digital shop, fully accounted for with each transaction.

But no, the writer doesn’t realize the blockchain is a digital tool that can house massive amounts of data and wealth within its network. Despite this truth, he would seem to be ok with businesses filled to the brim with cash exposed to criminals rather than having an accountable record of safely stored bitcoins. As well as the digital currency’s convenient storage features these cannabis companies could also convert the Bitcoin into digital dollars within a bank account immediately. However, the author says he has a “very limited” understanding of the currency but seems to know enough to say “no way,” and writes a very vocal opinionated stance against the technology.

Another aspect of the opinion piece that clearly shows flaws is his trust in government backing. The writer believes that because officials have “declared it to be legal tender,” fiat money has derived this power with no consequence. It is evident that fiat currency is backed by legal force and accepted because governments say so. Yet, this government issued currency has had so many severe issues such as devaluation and horrible boom and busts from inflation. Furthermore, the Cannabis Business Executive journalist praises the bailouts of 2008 saying:

“In the 2008, the U.S. poured trillions of dollars into our economy to avoid a loss of confidence in the U.S. dollar. Quite frankly the process worked amazingly well, and our economy has rebounded from a heart attack that could have been fatal to our currency, and with it, our economy.”

The author concludes that the cannabis industry will deal “primarily” in cash and most likely not deal with Bitcoin. Because people are being fed inaccurate information like this editorial, they will likely stick with cash. Why doesn’t any of these entrepreneurs realize how dangerous it is to have these businesses hold so much money out in the open. The system could operate in the most transparent way possible and not have thousands of dollars to safeguard and account for manually.

Fiat currency is also devalued by the central banking system and fractional reserve practices. Someone who bolsters quantitive easing may not be the logical person to listen about emerging markets. With a currency such as Bitcoin it has a limited supply, and as time progresses, it’s scarcity should bring substantial value to the protocol rather than hyperinflation brought on by the Federal Reserve’s printing press.

Not only does the author bolster the bailouts of 2008, but also helps promote what he calls “invasive government oversight.” Even though he believes the acts are “invasive,” the author details he still helped develop “Seed-to-Sale tracking,” a process of using tech to monitor every movement of a legal marijuana plant’s life. There’s not much you can take seriously within the words of this opinion piece but information like his editorial confuses people. One thing is for sure many of these businesses surely could use a bank, and there is one open 24 hours a day seven days a week. A lot of these entrepreneurs are steadily searching for a bank to use and, unfortunately, don’t see the decentralized protocol right in front of them.

Cannabis industry executive’s should, at least, consult someone who can tell them about Bitcoin from a studied background. Or maybe do some significant research about the digital currency before writing a counter-argument against the technology. Obfuscation is all his article contains and its a shame that some of these entrepreneurs don’t understand how cohesive these two budding economies could be.

What do you think about the opinion that Bitcoin will not mix well with the cannabis industry? Let us know in the comments below.

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